Boeing will start finding new buyers for the Boeing 737 Max aircraft that were built for Chinese airlines as the Chinese aviation regulator has not cleared the plane to fly after two fatal crashes, Boeing officials said. The decision was taken since Boeing cannot wait indefinitely while political tensions between the United States and China snarl deliveries. Boeing hopes that this move will reduce its inventory of undelivered Max aircraft, which built up while the planes were grounded around the world. China was once the biggest market for Boeing's Max planes.
Boeing confirmed that out of 290 undelivered airplanes in July, half were designated for Chinese customers.
Chief Executive Dave Calhoun and Chief Financial Officer Brian West discussed the need to remarket some of the planes at separate events.
During a Morgan Stanley conference, Brian West said: “China is an important market and Boeing did not make the decision lightly. But we are confident that Boeing can find new buyers for the planes, which list at $100 million and up although airlines routinely get deep discounts.”
Expressing pessimism about resuming the deliveries to China, Calhoun said: “We'll do it in a very slow way because I want to protect our customers in China but you can't wait forever. You've got to move them and there is a big market."
Boeing's hopes were raised last December when China's aviation regulator took a major step toward letting airlines resume using the Max. In February, Chinese airlines ran flight tests. But the Civil Aviation Administration of China has not taken the final steps to allow Max flights and deliveries to resume, which Boeing officials blame on COVID-19 lockdowns.
Meanwhile, the company was running out of patience.
The Biden administration has criticised China for preventing Boeing purchases. US Commerce Secretary Gina Raimondo said last year that the Chinese government was preventing its domestic airlines from buying "tens of billions of dollars" of Boeing airplanes.
China is the last major market where the Max is still awaiting approval to fly. The US Federal Aviation Administration approved changes Boeing made to the plane in late 2020 with regulators in Europe, Canada, and Brazil have following suit.
The importance of the Chinese market to Boeing was underscored in July when China's three largest airlines ordered nearly 300 planes from its European rival Airbus.
